Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana    
HOG SITUATION
AVERAGE WEEKLY PRICES of barrows and gilts at
Indianapolis reached a high of $23.44 during mid-July.
Since then prices have declined seasonally to current levels
which should average about $18.50 for October (all barrows and gilts). Since June, federally inspected slaughter
has averaged 10 percent above a year earlier. These heavier
than expected marketings combined with slightly heavier
hogs and more beef is largely responsible for the current
price situation.
Indications from the 10 state September 1 Pig Crop
Report, however, point to an easing of the current price
situation. The June through August pig crop is reported
down 1 percent as are intentions to farrow during the
September-November period. The 10 major hog producing
states account for about four-fifths of total U.S. production.
The inventory of hogs and pigs on farms, September 1,
in the 10 Corn Belt states provides additional information
on future marketings (Table 1). Based on this report the
number of hogs and pigs exceeding 180 pounds on farms
showed a 2 percent increase compared to year earlier levels.
The number of pigs in the 60 to 180 pound weight range
was down about 4 percent. The under 60 pound group
showed a slight increase. These figures indicate that marketings should run above year earlier levels through September
and October. Marketings during the remainder of 1967
are then expected to equal or fall below year earlier levels.
Prices during the remainder of 1967 are expected to
strengthen about $1.00 over the October figure of $18.50.
In addition to reduced marketings and increased population and income, price prospects will be strengthened by
reduced competition from beef and lamb.
Factors adding uncertainty to market prospects are:
1. Marketings have been running above levels indicated
by earlier Pig Crop Reports.
2. Pork production outside Corn Belt states may differ
from major hog producing states.
3. Large supplies of turkeys and broilers will offer stiff
competition during the Holiday Season.
4. Pork storage stocks were increased during the recent
price breaks.
5. Higher average slaughter weights are likely because
of favorable feeding ratios.
Based on a 1 percent reduction in the June-August pig
crop, marketings should be slightly below year earlier levels
during the first quarter of 1968.
As of September 1, farmers in the 10 Corn Belt states
planned to reduce farrowings 1 percent September to No-
October 31, 1967
ii m r«Tirrrm rrrrrB
INDIANA  FARMERS
by R.E. Schneidau and J. W. Uhrig, Agricultural Economics
vember compared to a year earlier. Average litter size will
influence the resulting pig crop. April-June marketings
should be about in line with a year earlier.
December-February farrowing intentions according to the
September 1 Pig Crop Report are down 2 percent. However, with fall prices in the $18-20 range and a favorable
hog-corn ratio since May, these plans are subject to substantial change. In addition, sow slaughter has been running
below a year earlier since June. Relatively favorable profits
from hog production coupled with reduced sow slaughterings point to the possibility of increased farrowings during
this period. If this occurs, the long term build up in hog
marketings will resume after mid-1968. The December 1
Pig Crop Report will provide further information.
In summary hog prices are expected to strengthen during
the remainder of this year and hold this strength into early
1968. The seasonal price rise that normally occurs as marketings decline during the late spring and summer months
is likely to be less than normal.
Feeder pig prices have declined in recent weeks to about
$15 level (40 lb. pigs). Based on prices expected at the
time of marketing along with low feed prices, purchase of
feeder pigs presents profit opportunities. In addition, hogs
may be hedged by selling futures. Currently contracts expiring December through February are selling around
$19.50/cwt.*
Table 1. Number of hogs and pigs on farms by
weight groups (excluding breeding
stock), ten Corn Belt states, September
1, 1966 and 1967
Weight Groups
1966
1967
Change
(lbs.)
220 and up
180-219
(000)
940
4,952
(000)
927
5,076
%
— 1 1
+ 2
+ 3 J
120-179
60-119
9,480
10,913
9,360
10,228
—11
<r_4
—6 J
Under  60
13,578
1 3,668
+ 1
Total
39,863
39,259
—2
For an explanation of hedging on the live hog futures market,
see Economic and Marketing Information, June 30, 1967, or
write to the mailing room, AES, Purdue University, Lafayette,
Indiana 47907, and request EC-312, Hedging on the Live Hog
Futures Market.